Spain is a top choice for businesses thanks to its key position in the European Union and its closeness to major economies like the UK, Italy, France, and Germany. In 2024, the World Bank ranked Spain 21st in its World Ease of Doing Business report. This favorable ranking has led to an increase in major companies tapping into Spain’s high-consumption markets.
A foreign entrepreneur interested in doing business in Spain can opt to establish either a sole trader (empresario individual or autonomo) or a company. Setting up as a sole trader requires no minimum share capital or initial investment, unlike forming a limited liability company or other entity types. However, as a sole trader, the individual assumes unlimited liability for business debts. OnDemand International offers legal expertise on the taxation and liability aspects of sole trader status, guiding clients through the entire setup process and providing ongoing legal representation as needed.
How to register a sole trader in Spain?
To register a sole trader in Spain, complete Form 030 and register with the Census of Liable Taxpayers to enter your details into Spain’s tax system, managed by the Agencia Tributaria or Hacienda. Afterwards, proceed to register with the autónomo social security system RETA (Régimen Especial de Trabajadores Autónomos). Provide your Spanish national insurance number (NIE), bank account information, and, for non-EU nationals, a work permit. Submit Form Modelo 036 or 037 along with proof of identity and your NIE number to Hacienda. These forms inquire about your business activities and whether you’ll be liable for IVA (VAT in Spain). Consult with OnDemand International to confirm your IVA obligations for services provided.
Documents required to register a sole trader in Spain
To register a sole trader in Spain, you need the following documents:
- NIE (Número de Identificación de Extranjeros) Number
- Residence permit (if not spain’s resident)
- Spanish bank account
- Form 030 (Census Declaration)
- RETA Registration
- Work Permit (if not EU resident)
Benefits of sole trader in Spain
The following benefits you will get as a sole trader in Spain includes:
- Easy and Quick Registration: Establishing a sole proprietorship in Spain is a straightforward process with minimal paperwork and low fees, making it an ideal choice for small businesses and aspiring entrepreneurs.
- Full autonomy as the proprietor: As the sole owner, you have complete control over the business without the need to involve shareholders or seek external approvals.
- Few government regulations: Sole traders face fewer government regulations compared to larger corporations, reducing the time and resources spent on compliance and reporting.
- Tax advantages: There are tax advantages as well, as sole traders are personally responsible for filing their tax returns and reporting profits, without the complexities associated with corporate tax structures.
How OnDemand International helps you
While establishing a sole proprietorship is straightforward in Spain, navigating tax management and adhering to local and international laws poses significant challenges. Spanish regulations for sole traders are stringent, requiring strict adherence to complex rules. Seeking professional legal and financial guidance may be necessary to navigate these hurdles effectively.
OnDemand International facilitates market expansion and ensures compliance with all pertinent regulations. Our digital platform simplifies tax payments, benefits management, and keeps businesses informed about evolving legal requirements. Contact us to explore how we can support your business in achieving greater success.
